Hypercom Drops Verifone Suit to Update Stockholders

Hypercom has voluntarily withdrawn its lawsuit against VeriFone Systems seeking to preclude VeriFone from violating a two-year Mutual Nondisclosure Agreement signed by both companies on June 25, 2009. Hypercom disclosed it necessary to withdraw the litigation in order to set the record straight for its stockholders. This comes on the heels of September 24th, 29th and 27th unsolicited proposals Verifone made to acquire Hypercom outstanding shares for $5.25 per share in cash for a total of $290 million, which was unanimously rejected by the Hypercom Board of Directors and for which Verifone incorrectly suggested it had not engaged Hypercom in meaningful discussions. Hypercom also wanted to drop the suit against Verifone to establish for its stockholders the September 24 and September 27th proposals contained terms that the Board concluded significantly undervalued the Company and were substantially reduced compared to several previous private proposals. Recently, however, sources disclosed VeriFone is pursuing a hostile takeover of Hypercom, although Hypercom disclosed projections of a prosperous 3Q/10 high above Wall Street predictions of $112 million in net revenues (Cardflash Library 2010/10/04, 2010/09/30, 2010/10/07).

Prepaid Cards Move Beyond Young and Poor

Prepaid card products are moving beyond lower income and younger consumers and are now spread relatively evenly among most income groups.
A new report finds that about 18% of Americans earning between $35,000 and $75,000 per year are using prepaid products both online and offline.
Javelin Strategy & Research says with multiple loading and reloading mechanisms available today, prepaid cards have longer-term usage and are less disposable in nature, making prepaid programs attractive to financial institutions as a versatile method to increase revenue. Also, the multi-channel nature of the prepaid relationship with middle-to-higher income consumers demonstrates and validates the revenue stream capabilities that prepaid issuance provides. Javelin also found that security is paramount in prepaid card issuance, not only in terms of fraud mitigation but also in the scrutiny that issuers face to comply with anti-money-laundering and “know your customer” initiatives. The new report finds that the processor choice is often overlooked and undervalued by prepaid program managers.

PREPAID USAGE
(by Annual Income)

$150K
None 22% 17% 15% 3%
Online 9% 14% 21% 9%
Offline 11% 16% 21% 5%
Source: Javelin Strategy & Research

Javelin Prepaid Card Processor Report Offered

A new report from Javelin reviews prepaid card issuer programs and the
ways in which a prepaid card program can be maximized.
Javelin looks at the four key components of an effective prepaid
processing program, including managing the card, serving the cardholder,
executing the transaction and, getting the most from the platform.
Recommendations include a
need to focus on the business objective; holistic processing; allowing
customer preferences to
drive product innovation; strong security and risk management and
developing a plan for growth.

Paperless Initiatives Gather More Steam

MA-based Aite Group has released findings of its report on paperless initiatives based on an October ’07 survey of 505 American professionals. In addition to regulatory initiatives recently proposed by the SEC to post mutual fund prospectuses online and supply only a “summary prospectus” in paper form of between two and four pages, saving the industry more than US$65 million annually in printing and postage, the research finds varying degrees of reception in different sectors, mostly positive. In financial services, cost is fundamental to paperless efforts, retail firms see paperless options as an opportunity to eliminate reams of paper stored in branches and, across all industries, paper customer correspondence is undervalued by recipients considering financial/environmental costs. Aite Group, LLC research and advisory firm focuses on issues impacting the financial services industry.

Pershing Square Wants Ceridian Board Out

Hedge fund Pershing Square is continuing its proxy battle to derail Ceridian’s proposed sale to Fidelity National Financial and private equity firm Thomas H. Lee. Pershing wants to unseat the entire board of Ceridian. Pershing Square says the deal is way undervalued and the Company is mismanaged. Ceridian yesterday responded saying Pershing Square has failed to date to present any economic proposal for the Company and its stockholders. Ceridian says Pershing Square has resorted to personal attacks. The Board recommended that Ceridian stockholders approve the pending merger and receive $36 per share in cash and vote for the Company’s slate of directors who will work to close the transaction as quickly as the agreement permits. Pershing Square owns about 15% of Ceridian.

Acxiom Corporation Acquired for $3B

Silver Lake and ValueAct Capital have agreed to acquire Acxiom Corporation for $3 billion. Under the terms of the agreement, Acxiom stockholders will receive $27.10 in cash for each outstanding share of stock. This represents a premium of approximately 14 percent over the closing share price on May 16, 2007, the last trading day before disclosure of the agreement with Silver Lake and ValueAct Capital with respect to the acquisition of the company and a premium of approximately 20 percent per share over Acxiom’s average closing price per share during the 30 trading days ended May 16, 2007. The merger agreement provides that Acxiom may solicit and entertain proposals from other companies during the next 60 days. In accordance with the agreement, the board of directors of Acxiom, through the special committee and with the assistance of its independent advisors, intends to actively solicit other proposals during this period. Acxiom Corporation integrates data, services and technology. Silver Lake is an investment firm focused on large scale investments in technology, technology-enabled, and related growth industries.

Asian Americans Most Affluent Consumers

A new report has found that Asian Americans represent the single most affluent consumer group in the USA, trumping their Hispanic counterparts. The study by Packaged Facts says Asian Americans have $400 billion in total buying power. Also, Asian Americans have per capita income of $25,786 versus $14,007 for Hispanics, and a median-household income $56,161 versus $35,929 for Hispanics. Additionally, the Asian population of nearly 13 million has grown at a rate of only 1% less than that of Hispanics in the last five years. Packaged Facts says Asian Americans are big on family, designer items, technology, Internet shopping, and healthy living.

Consumer Spending to Rise 3.1% in 2006

A new forecast suggests that the Fed will increase the funds rate to 4.75% by March and will hold that rate steady throughout the rest of 2006. Despite a housing price slowdown, higher oil prices and Fed rate increases, Wells Fargo’s senior economists forecast steady economic growth next year. However, the main risk for the economy next year is the extent to which the housing market downturn could dampen consumer spending, credit quality and job creation. Nevertheless, Wells Fargo forecasts a 3.1% growth rate in consumer spending next year, down from 3.6% in 2005.

CompuCredit’s Jefferson Capital Pays-Off

CompuCredit’s new collection subsidiary is paying off, as the business produced nearly 18% of the issuer’s second quarter net income. Late last year, CompuCredit formed Jefferson Capital Systems to target the defaulted receivables recovery area. The issuer says it entered the business because it believes many charged off credit card receivables are undervalued and because of the firm’s excess servicing capacity resulting from the declines in managed receivables. Through Jefferson Capital, CompuCredit acquired defaulted accounts with an aggregate face value amount of approximately $302 million at a cost of $9.4 million during the second quarter, and these activities generated pre-tax net income of $5.8 million during this same period. For the first six months of this year, the firm acquired defaulted accounts with an aggregate face value amount of $1.8 billion at a cost of $24.3 million, and these activities generated pre-tax net income of $10.2 million during this same period. All but one of the Company’s acquisitions of previously charged off credit card receivables during the first two quarters of 2003 were from the securitization trusts underlying the Company’s retained interests investments ($23.9 million in purchase price). For complete details on CompuCredit’s 2Q/03 performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

TRINTECH BUY-BACK

Trintech Group has secured the final approval of the Irish Takeover Panel
to commence its share buy-back program. The Irish Takeover Panel has ruled
that John and Cyril McGuire are not acting in concert and therefore would
not be required to make a mandatory bid for the Company if their relative
percentage ownership increased following the repurchase by the Company of
its own shares through the buy-back program. This ruling allows Trintech to
start the buy-back program, which is expected to commence in early December
following publication of the Company’s results for third quarter, the
period ended October 31, 2002.

TRINTECH BUY-BACK

Trintech Group announced it remains committed to implementing its
previously announced program to buy-back up to $5 million of its shares and
will do so following approval of the Irish Takeover Panel. The company says
it is in the process of securing approval from the Panel to engage in a
buy-back of shares on the open market without triggering the requirement
for the largest shareholders to make a mandatory bid for the Company. One
such rule is that if the percentage ownership of a group of investors
acting in concert owning more than 30% of the share capital increases, the
connected investors may be required to make a mandatory bid for the
Company. John and Cyril McGuire, being brothers, are considered technically
to be acting in concert under the Takeover Panel rules and their relative
percentage ownership would increase as the Company bought back its own shares.